Four Charged in SoCal Insurance Fraud

SAN DIEGO (CN) – Two attorneys and two insurance brokers were charged Thursday with fraudulently causing life insurance companies to issue $50 million in policies to unqualified people who had no intention of paying the premiums. The defendants made $1.6 million from the ruse, plus the chance to sell the fraudulently obtained life insurance policies to investors, the U.S. Attorney’s Office said. Criminally charged were attorneys Kasra Sadr and Brenda N. Barrera Merriles, both 43, both of San Diego, and insurance agents Byron Arthur Frisch, 36, of Carlsbad, and Kristian Marcus Giordano, 36, of Temecula. “According to the indictment, the defendants employed multiple means to deceive the insurance companies,” the U.S. attorney said in a statement. “Initially, the defendants recruited elderly individuals to apply for ‘free’ life insurance policies with million-dollar death benefits. They then submitted fraudulent applications to the life insurance companies by intentionally omitting or falsifying the applicant’s net worth, income or source of premium payments. In addition, the conspirators concealed that they were paying all or part of the policy premiums and intended to sell the policies on the secondary market for large profits.” Frisch and Giordano ran the scheme from their La Jolla office, and Sadr and Barrera “secretly funded the policy premiums, acted as trustees for policy applicants, and controlled sales of the policies on the secondary market,” prosecutors said in the statement. The defendants are to appear before U.S. District Judge Janis Sammartino for a motion hearing on Sept. 6. They are charged with conspiracy to commit mail fraud and wire fraud, eight counts of mail fraud and 14 counts of wire fraud. The conspiracy charge is punishable by up to 5 years in federal prison, all the other counts by up to 20 years, plus fines of $250,000 or twice the ill-gotten gains or losses.